When most people think of estate planning, they think of wills. And for good reason. A California last will and testament (since we are talking about California) provides a means, recognized by statute and the common law, of establishing once and for all what happens to the property of the testator (i.e., the person who executes the will) after death. Of course, there’s a lot more to California estate planning than just wills. But, even so, a will is the quintessential California estate-planning instrument.
Keys to Using a California Last Will and Testament
for California Estate Planning
In California estate planning, wills are often used in conjunction with joint ownership, beneficiary designations, trusts, family entities, and various other strategies to ensure smooth transition of wealth from one generation to the next. In fact, you can even use a California last will and testament to create a trust (testamentary trust) providing support for loved ones long after an estate has been settled.
A California last will and testament doesn’t need to be complicated, but it should always be well-thought-out, with due consideration paid to the ramifications of each decision incorporated within the will. And, perhaps just as importantly, a will must meet all of the statutorily required formalities for a valid will. A defective will can sometimes provide evidence of the testator’s intent, but it’s not enforceable in the same way as a will that checks all of the statutory boxes. Because California’s requirements aren’t precisely the same as other jurisdictions, it’s usually a good idea to consult with an experienced California estate-planning attorney when creating a California last will and testament.
Requirements for a Valid Will in California
Under California law, a California last will and testament must be in writing, signed by the testator, and witnessed by two competent adults. The witnesses must also sign the document, acknowledging that the testator did in fact execute the will and was “of sound mind” when doing so. For a will to be admitted to probate, it must be an original document (i.e., not a photocopy). So, it’s a good idea to execute more than one original and keep the identical originals in more than one safe location.
Notarization is not required in California, though many wills are still notarized. In some jurisdictions, a will with an accompanying notarized affidavit is considered “self-proving” and so no additional evidence is necessary to establish the will’s authenticity in probate. In California, a California last will and testament that is validly executed and meets all statutory formalities is assumed to be legitimate unless evidence is brought forward to the contrary.
A will’s two witnesses should be disinterested, which means they have no stake in the will or the testator’s estate. A witness with an interest in the estate doesn’t necessarily invalidate the will (as in some jurisdictions), but any bequest to a witness is presumed to have been improperly secured. If the will results in the witness receiving a greater share than he or she would have received absent the will, that specific bequest may be voided.
Once a valid will is in place, it can be amended by editing and executing a new will with revised terms or through a separate document known as a “codicil.” Importantly, a codicil must satisfy all the same requirements as an original will to be valid. Codicils are handy for relatively minor adjustments or corrections. But, for major changes, it’s often better to just create an entirely new will and revoke the earlier one.
A California last will and testament can be revoked by destroying the document with the intent that it be revoked, or by creating a new will that clearly expresses the intent to revoke the prior will. If a testator goes through a divorce subsequent to executing a will, California law assumes that any bequests to the former spouse made in the will were meant to be revoked unless the will states otherwise.
The California legislature has promulgated a form “California Statutory Will” designed to satisfy all requirements for validity in a relatively easy-to-use template. As long as the form is filled out correctly (including by the required witnesses), an executed California Statutory Will is a valid will admissible in probate. The form is written generally and provides blanks for the testator to fill in, so, while it can be useful for simple, straight-forward estates, it is often inadequate for larger or more complex estates.
Non-Standard Wills under California Law
Ideally, a completed will clearly meets all requirements of the California Probate Code. Sometimes, though, there are extenuating circumstances that make that difficult or impossible. And, sometimes, well-meaning individuals draft their own wills without consulting an experienced attorney and neglect to observe all formalities. In limited circumstances, California law recognizes “holographic” wills, provided the document bears the signature of the testator and all pertinent provisions of the will are recognizably in the testator’s own handwriting.
Holographic wills can be useful in emergency situations but shouldn’t be thought of as a substitute for a formal will. Due to their informal nature, holographic wills open the door for challenges as to testator capacity, forgery, and concerns over authenticity. Testators are also more likely to neglect important provisions when drafting a handwritten will without the benefit of experienced counsel.
A nuncupative will (or “oral will”) is based on verbal statements made by a purported testator in the presence of witnesses and usually while in a life-threatening situation. California does not recognize nuncupative wills, and the states that do recognize them typically limit their validity to severe situations like a soldier in a combat zone. Deathbed statements can be evidence of a decedent’s intent if an estate is contested, but California law will not treat such statements as an enforceable, dispositive will.
Elements of a Will [What Should be Included?]
The first thing that comes to mind for most people when creating a will is distribution of estate assets. And, while bequests are an absolutely critical component of a will, there are several other elements that a solid will needs to address. Of course, the precise provisions of an individual will depend on the testator’s circumstances.
Designation of an Executor: An executor is the individual appointed in a will and empowered by the probate court to administer the testator’s estate. When no will is present, the role is filled by a personal representative appointed by the court. Along with securing and inventorying assets prior to distribution, an executor handles creditor claims and acts on behalf of the estate in legal matters, including by filing tax returns.
Once empowered, an executor has a fiduciary duty to the estate and to the decedent’s heirs who stand to benefit from it. Under that duty, he or she must act diligently, honestly, and in the best interests of the estate. An executor should be a trustworthy adult capable of doing the job competently. It’s generally a good idea to pick an executor who has a fairly good understanding of your circumstances and is familiar with your final wishes.
Bequests: Bequests are the provisions of a will identifying beneficiaries of estate assets. Bequests can be stated as a percentage of the overall value of the estate or as “specific bequests.” Specific bequests grant precise assets to named beneficiaries. A “residual” or “residuary bequest” gives the remainder of the estate to a designated beneficiary after specific bequests have been distributed.
It is sometimes helpful to create a “personal property memorandum” setting forth intended recipients of tangible personal property. The memorandum, which is incorporated into the will by reference, is a list of items and/or categories of personal property that identifies a beneficiary for each entry. It should not include real estate or intangible assets like intellectual property, or most high-value items (all of which are better included within the will itself). Instead, the schedule lists items like furniture, mementos with sentimental value, books, jewelry, collectibles, and the like. The advantage is that the list can be revised and updated as items are acquired or sold without the formality of a codicil. Personal property memoranda are useful for avoiding conflict among beneficiaries over who gets what.
Guardianships for Minors: A California will can include instructions for the care of the testator’s minor children in the event of the testator’s death. Although this is obviously not necessary in all wills (because not every testator has minor children), a guardian appointment is one of the most important testamentary provisions when the testator is a parent of young children.
A guardianship appointment should identify a responsible, willing adult who is capable of serving as a guardian for minor children. Although he or she still needs to be formally appointed by a judge, courts give substantial deference to parents’ wishes when appointing guardians. Absent a guardianship provision, the court will attempt to act in the child’s best interests—typically appointing a close relative who has a preexisting relationship with the child.
California law acknowledges two distinct, though sometimes overlapping, forms of guardianship: guardian of the person and guardian of the estate. A guardian of the person is responsible for providing for the child’s general care and well-being, making decisions relating to housing, education, medical care, etc. A guardian of the estate is responsible for overseeing and managing a minor child’s finances—real and personal property, financial assets, income, etc. A guardian of the estate acts as a sort of trustee over a minor’s finances, and it is not uncommon for assets to be held in trust until the minor reaches adulthood.
Disposition of Remains: An executor’s duties often include making arrangements for the testator’s funeral and disposition of final remains. Whether the testator wishes for his or her remains to be buried, cremated, or donated to medical science, the preference should be unambiguously set forth in a will so that the executor and surviving family members do not have any doubts over the appropriate course of action.
Why Write a California Last Will?
There are plenty of good reasons to write a California last will and testament, not the least of which is to reduce the chance of conflict between family members after the testator’s death. Absent a will (or some other strategy for transferring wealth), assets are distributed to heirs under state law, and the decedent doesn’t get any say. California’s intestate succession laws favor close relatives, with surviving spouses and children enjoying the highest priority. While that is what many people want in general, there isn’t any room for flexibility in intestate succession.
Intestate succession laws simply identify portions of a decedent’s total estate that heirs receive. If you want to leave specific assets to specific heirs, you need a will. If, for instance, you are unmarried and have two children, each of the kids will split the estate fifty/fifty. This often leads to conflict because one heir might want to sell an asset the other wants to keep. So, if you’re daughter wants to keep the family farm within the family, but your son prefers to sell it, a will would let you bequeath the farm to the daughter and make up for the son’s share with other assets.
Sometimes, placing a monetary value on certain assets can be difficult, potentially resulting in bitterness on the part of an heir who feels short-changed. A will, though, removes any doubt by setting forth distributions in advance. The increased certainty lightens the burden on an executor forced to make difficult decisions in a highly emotional time.
Wills also facilitate transfers to beneficiaries who would not receive anything under intestate succession rules. For instance, if you want to leave part of your estate to a charity that is dear to your heart, you’ll need to use a will. Or, you might want to divide your estate fifty/fifty between your two children but leave the 1967 GTO that you spent years working on to the nephew that helped you restore it. Or, you might want to leave a greater share of your estate to the daughter who helped you run errands and keep the house in order after you could no longer do the regular maintenance. A will can accomplish any of these objectives, but intestate succession cannot.
It’s worth pointing out that wills only apply to probate assets, so assets that pass outside of probate (through a living trust, for example) are not controlled by a will. Even so, if you’re relying on a living trust for asset transfers, it’s still a good idea to execute a “pour-over will” to cover any assets that were never transferred to the trust. A trust only affects property actually in the trust, and so, absent a pour-over will, non-trust assets pass through probate under intestate succession laws.
Wills can also avoid uncertainty over issues not directly related to wealth. If a decedent with minor children does not leave a will, a judge decides who takes care of the kids. The judge will try to act in their best interests, but he or she doesn’t know the family and potential guardians (and the children themselves) as well as the testator. And, having a capable guardian already appointed can streamline the guardianship proceedings, making things easier on the children.
Finally, disposition of last remains is a surprisingly common source of conflict during administration of an estate. Surviving relatives want to see the decedent’s final wishes carried out, and often feel very strongly about it. But, if two or more family members have conflicting views as to precisely what the decedent wanted, things can get heated. A will that lays out unambiguous instructions for funeral arrangements and disposition of remains nips this potential source of family conflict in the bud.
Administration of a California Last Will and Testament
in California Probate Court
In California probate, administration of decedents’ estates occur in the probate court of the county in which the decedent last resided. The process begins with the named executor submitting the original will to the court along with a petition asking that a probate case be opened. The executor is then formally appointed to the role by the court and begins gathering information, securing estate assets, and providing notice of the estate to beneficiaries and creditors.
After preparing a thorough inventory of assets, the executor reviews and (if appropriate) pays creditor claims from estate assets. If the estate has any claims of its own—such as accounts receivable or pending causes of action—the executor pursues them on the estate’s behalf. Then, remaining assets are distributed to beneficiaries in accordance with the terms of the will. The probate court oversees the administration, and the executor files several different reports throughout the process.
The length of the process can vary considerably between estates. A relatively small, simple estate can be concluded within a few months. A complex estate, or an estate that is involved in litigation, can take several years to finally wrap up. Expenses involved in administering a California estate include filing fees and other court costs payable to the probate court and any fees owed to accountants, appraisers, attorneys, or other professionals the executor needs to retain. Administrative fees are paid from estate assets and receive priority over most other claims against an estate.
In California, probate estates with assets totaling less that $150,000 are usually eligible for streamlined administration, which saves both time and money. In the streamlined small estate administration process, assets can be distributed in reliance on affidavits completed by beneficiaries and the executor’s acknowledgement. The $150,000 cap for small estates notably only includes assets which actually pass through probate. Thus, an estate plan that transfers assets valued at more that $150,000 through non-probate strategies—like revocable trusts, POD and beneficiary designations, and joint ownership with right of survivorship—can still qualify for simplified administration as long as the probate estate stays below the maximum.
California law also provides for quicker, simpler administration of some or all of an estate via the Spousal Community Property Form. If a surviving spouse is the only beneficiary of the decedent’s will (or if the decedent is intestate), the Community Property Form allows the decedent’s interests in community property to transfer directly to the surviving spouse based on a petition, rather than through the full, formal probate process. Assets held separately by the decedent spouse, or that were bequeathed to other heirs, must still go through probate.
Administration of Living Trusts in California
By way of comparison, a California revocable living trust used as an alternative or supplement to a standard California last will and testament can sometimes avoid the need for probate and allow for simpler and less costly California trust administration. Often, the grantor names him or herself as trustee of a living trust and names a successor trustee to take over upon death. After the grantor dies, the successor trustee carries out duties similar to the executor of a will and likewise has a fiduciary obligation to the trust’s beneficiaries. A trustee’s precise duties depend on the instructions left by the grantor and whether the decedent also left a will. Typically, the successor trustee of a living trust is tasked with taking charge of and maintaining trust assets, paying out trust expenses or debts of the decedent (such as taxes), and making distributions to the trust’s beneficiaries.
If the deceased grantor also has a probate estate, creditor claims are handled through probate. However, if there is no probate estate or probate assets are inadequate to pay all claims, creditors can assert claims against the trust. When no probate estate is opened, the successor trustee is responsible for notifying creditors of the trust’s administration so that they have the opportunity to present claims against trust assets.
Compared to wills, trusts have the advantage of increased flexibility and long-term control over assets. A trust can be structured so that the trustee only distributes assets on a defined schedule or upon the occurrence of certain events, which can ensure beneficiaries enjoy long-term benefits of the assets in the trust. By contrast, assets bequeathed in a will become the property of beneficiaries upon distribution, with more or less no strings attached.
The downside of using a trust to distribute assets is that, upon transferring assets to the trust, the grantor relinquishes legal ownership. If the grantor is also the trustee, this is mostly only a technical distinction, as the grantor / trustee still controls and benefits from trust assets. With an irrevocable trust, though, the grantor gives up effective control once the trust is formed.
Testamentary trusts, which are trusts created via a California last will and testament , allow the testator-grantor to retain legal ownership of assets during life but still exercise some long-term control. Within the will, a trust is established and funded using assets from within the probate estate. The trustee then manages the assets bequeathed to the trust on behalf of the trust’s beneficiaries. Testamentary trusts are handy for testators who want to provide for the support of a disabled person without jeopardizing eligibility for government benefits such as Medicaid; or provide for the health and education of a minor beneficiary until he or she reaches the age of majority; or provide enduring support for a loved one who lacks the discipline or financial management skills to properly manage a lump-sum bequest.
While living trusts are often described as a substitute for a will, many California estates are best served by a combination of a California last will and testament and one or more California trusts. An experienced California estate-planning attorney can help in evaluating your situation and deciding on the best approach for an efficient and well-organized estate plan.
Steve Gibbs, Esq.